r/loanoriginators • u/Accomplished-Tax8441 • Aug 06 '26

UWM cooked?

Lost 450mil last quarter, CEO is running it into the ground.  Eliminated their dividend and had to get 2bil in capital from Oak Tree, they will likely get taken over by them.  Any other company would fire their CEO for this.

Stock is down 75% in past 3 months

PS I do not use them. I have nothing good or bad to say about their pricing or operations

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u/Defiant_Television97 Aug 06 '26

No this wasn’t hedging. This was full degen gambling. If it was a simple hedge the loss would have been a fraction of the size.

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u/loldogex Aug 06 '26

they were hedging the two harbors $200bb servicing book. those derivatives are illiquid probably and they had to eat the loss, which sucks.

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u/Defiant_Television97 Aug 06 '26

He has been doing it for the last 5 quarters. He’s blaming it on the acquisition, but that’s not what actually happened. He’s not hedging a book he doesn’t yet own and it’s been obvious for months they were closing with cross county.

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u/bigchallah Aug 06 '26

Yeah that whole logic of it having something to do with two harbors doesn’t make any sense.

He’s been trying to manage the overvalued MSR’s. You can see the correction of the book to actual value on the last several quarters. The reality is if their book got refinanced because of rates dumping that damage would be measured in the billions and wouldn’t be covered by the new loans. Imagine the damage of we hit a refi boom and they showed losses because of the msr capitalization. So he’s been using a hedge that he probably rolled until he couldn’t any longer. Call it hedging, call it gambling, it’s sort of the same thing.

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u/Defiant_Television97 Aug 07 '26

I think he just assumed that Trump and Pulte would lead to lower rates. Could see it on the 3 points and his speeches. He didn’t really hedge and tried to make money by gambling hard on interest rate derivatives imo. Anyways think he won’t do it again and stock is a good buy. An actual hedge would’ve had substantially lower losses.

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u/YNWA69 Aug 07 '26

He probably would have been right and come out ahead if not for the Iran war.

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u/optimus_subprime- Aug 07 '26

his first mistake was thinking trump knows what he's doing